22 July 2009

One thing that I have to give conservatives credit for is that they are always reading off the same script. Sometimes hilariously so, as when Michael Steele ("the gift that keeps on giving") tried to talk health policy the other day. He dutifully repeated all of pollster Alex Castellano's talking points, word for word, until when he had to take questions, when he finally admitted that he doesn't know his ass from a hole in the wall "doesn't 'do' policy."

But still, great message discipline! That's always been their forte. But it makes a tiresome chore to smack down all the odd lies they come up with, again and again, just like in the old zombie movies. You give it both barrels of a 10-gauge, but it shambles forward mindlessly. "Braaaiinssss..."

The one I have seem pop up most recently is the odd lie that the House Tri-Com bill (HR 3200) will "outlaw individual private coverage."

Huh? I thought that's what the National Insurance Exchange was for?! Where did that come from?

It’s over 1,000 pages long. On the 16th page, it says whatever health care you have now, it’s going to be gone within five years. So your current health care plan, you’re not going to have in five years. What you’re going to have is a government plan and a federal bureau is going to decide what you get or if you get anything at all.

It didn't take long to run into an "uh-oh" moment when reading the House's "health care for all Americans" bill. Right there on Page 16 is a provision making individual private medical insurance illegal.

How odd that they both cite "page 16" in their rants, both of which were published on the same day. It's almost as if this were somehow coordinated... Nah. I must be getting paranoid.

The provision they are referring to, by the way, is this (edited for clarity/brevity, full text at the link):

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

(a) Grandfathered Health Insurance Coverage Defined- Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term `grandfathered health insurance coverage' means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:

(1) LIMITATION ON NEW ENROLLMENT- Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

(2) LIMITATION ON CHANGES IN TERMS OR CONDITIONS- Subject to paragraph (3) and except as required by law, the issuer does not change any of its terms or conditions, including benefits and cost-sharing, from those in effect as of the day before the first day of Y1.

(3) RESTRICTIONS ON PREMIUM INCREASES- The issuer cannot vary the percentage increase in the premium for a risk group of enrollees in specific grandfathered health insurance coverage without changing the premium for all enrollees in the same risk group at the same rate, as specified by the Commissioner.

(b) Grace Period for Current Employment-based Health Plans-

(1) GRACE PERIOD-

(A) IN GENERAL- The Commissioner shall establish a grace period whereby, for plan years beginning after the end of the 5-year period beginning with Y1, an employment-based health plan in operation as of the day before the first day of Y1 must meet the same requirements as apply to a qualified health benefits plan under section 101, including the essential benefit package requirement under section 121.

(c) Limitation on Individual Health Insurance Coverage-

(1) IN GENERAL- Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan.

So what does this mean in the real world?

Individual health insurance policies already in effect may continue but may not be altered.

Employer-sponsored plans have five years to get in compliance with the new regulations.

New individual health insurance policies will only be available through the National Insurance Exchange (NIE).

Remember, the NIE is where the private insurers will be competing against one another as well as against a possible public plan, if it survives. It is not synonymous with a "government plan," though I hope that consumers will have the choice of a government-sponsored insurance policy. The new regulations referred to are simply those I've outlined many times before -- community rating, guaranteed issue, and a minimum benefits floor.

The Investors.com piece is by far more blatantly dishonest. For example, they stated, "those who leave a company to work for themselves [will not] be free to buy individual plans from private carriers." But this is flatly false, since individual plans will be freely available through the NIE. They also write, "a public option [...] will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it," which disregards the fact that both the House and Senate bills make it clear that the public plan will be funded through premiums, not from general revenues. If there is a price advantage to the public plan, it will be due to lower reimbursement to providers, not from taxpayer subsidies. And the citation of "The nonpartisan Lewin Group estimated in April that 120 million or more Americans could lose their group coverage at work and end up in such a [public] program," ignoring that this estimate was not based on the plan as it currently exists, and the CBO estimated that only about 10 million people would choose the House's "strong" public option. And as a sort of a coda, the author repeats the simply false claim, "What wasn't known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law." It's simply not true. Private plans will be available, and competitive, through the NIE. You can't get more dishonest than that.

I should also point out that the wingnut echo chamber is resonating a little bit over this:

During [a conference call] call, a blogger from Maine said he kept running into an Investors Business Daily article that claimed Section 102 of the House health legislation would outlaw private insurance. He asked: “Is this true? Will people be able to keep their insurance and will insurers be able to write new policies even though H.R. 3200 is passed?” President Obama replied: “You know, I have to say that I am not familiar with the provision you are talking about.”

This was described as "disturbing" and evidence that the President is out of touch with the reforms he's advocating. Right. I mean, wrong. You see, he's not ignorant of the bill, he's just not familiar with the bits of it that exist only in the fevered nightmares of his political opponents.

And by the way, let's not make too much of the oft-repeated promise, "If you have health insurance, and you like it, [...] then you can keep it." This is technically true, for a limited time. He did not promise and it's foolish to think that it was promised that "If you have health insurance, and you like it, then you can keep it forever." I don't have the health plan I had three years ago, and I'm sure I'll have a different one in another three years. If you imagine that your insurance coverage was going to stay in stasis forever, preserved in amber, then you are frankly delusional. We are all going to be under the new regulations sooner or later, and this is a good thing -- it is the whole point of insurance reforms. For most of us, we will not even notice the changes, though it may get more expensive for some and cheaper for others. But it is a distortion of Obama's intent to extrapolate that he promised that none of us would ever have to deal with changes.

OK, that was tiresome and annoying to have to deal with, but it's just part of the territory when you are dealing with zombie lies. Now don't even get me started on the $23 Trillion bailout...

28 comments:

You've been pounding away at the right for demagogueing (sp?) this issue, but have you ever looked at it from the other side?

Why are you so insistent on government provided health care? What is so great about the government doing it?

Why not push for reforms and incentives that improve access, reduce cost, and improve quality of health care without putting Uncle Sam any further into the health game than he already is?

Most of the successful health care systems around the world were homegrown, using pieces that already existed (ex - NHS growing out of the UK's wartime health system). The US government (until recently) is mostly set up not to provide services, but to regulate the services provided. It seems like a really smart politician could come up with a way to incentivize/regulate our existing system so that it achieves more goals. The left seems willing to jump right over that step and put Uncle Sam in charge of everything. Their unwillingness to consider that intermediate step speaks of an underlying ideology.

Part of what's frustrating to me when reading your blog is how quick you are to point the finger at the right and scream "POLITICS!!!!" while you yourself are guilty of doing the same thing from the other side. At best, it seems hypocritical and at worst, it seems like splitting.

I thought once something was forced to be in Nat'l Insurance Exchange (ie every private policy after a certain timeframe) that it meant that there was "guaranteed acceptance" into a plan of your choice, public or private. With guaranteed acceptance, that eliminates the concept of health insurance since companies can't effectively insure if they have to accept everyone. So, yes, if you mandate acceptance into every plan in the nation, private health insurance is defunct as a concept. Companies are insured as a group (which is why companies are able to offer guaranteed acceptance insurance to employees) whereas individuals are traditionally insured as individuals.

It's an EMTALA-style unfunded mandate on insurance companies. You must take a loss on everyone who wants your service and whose projected payouts would be > than pay-ins. To me, it means the end of health "insurance" if companies can't opt out of insuring you.

Henry -- "Why are you so insistent on government provided health care? What is so great about the government doing it?"

Not to niggle, but I'm for government-sponsored INSURANCE, not government-provided health care. I'm not recommending we should replicate the NHS or take the VA nation-wide.

I'm for government-insurance because I think the government can do it better & cheaper. If the plan can be designed fairly, I'd love to see them compete against the private insurers, and see if I'm right. If patients do not choose to enroll in the public plan, then that's fine; I would not make it compulsory. Include it as an option, and let the market decide. I'll abide by the decision of the market. I am not a back-door single-payer guy. If the free-marketeers are right, the private market should respond to this competitive threat by innovating, by improving, and by winning out. If that happens, then we all win.

K,"With guaranteed acceptance, that eliminates the concept of health insurance since companies can't effectively insure if they have to accept everyone."

Not so. Insurers know how to distribute risk. When a large employer like Boeing hires a 50 y/o dude with diabetes, Blue Shield builds that into the company's premium, because they can't refuse the employee coverage. Effectively, all the healthy workers subsidize the medical care for the sick worker. Similarly, for individual plans, when the insurers no longer can refuse to issue a policy, their actuaries will calculate an age-adjusted community rating and every enrollee will pay the "average" risk rate. So again, the healthy will be subsidizing the sick. And that's how it's supposed to work, by the way. Healthy people pay a higher rate to hedge against the risk that they will become ill, because you can't know in advance if your number is the next one up.

Sounds like an excellent way to have premiums increase for the majority of Americans. We'll just add "increased insurance premiums" to my running list of "ways this is going to affect everyone, not just the rich". It's not a tax though, no sirree Bob. There were so many catastrophic claims one year on our group policy that our policy was declared cost-prohibitive, and we had to reduce our benefits.

Hopefully, if too many sick individuals try to take out an individual policy, my insurer will cease offering individual policies rather than raise MY rates to cover them. I'll add this to my running list of "ways to get rid of private insurance" too.

The premium changes should balance out across a sufficiently large population, so for every dollar of premium decrease you experience, someone else's will increase by a dollar. That's if the insurance company is being honest and not just jacking up everybody's rates (this is part of what the public option is designed for).

More to the point, by adding a mandate, you add millions of new insureds to the risk pool, many of whom were healthy and in theory most people already insured under individual policies should see reductions in premiums.

We had THREE, yes, THREE catastrophic claims due to cancer, surgeries, etc and our policies for 1000s of nurses became cost-prohibitive. They solved that by capping our lifetime spending at 1 million dollars/person.

The other thing you can do if you're the govt (eg. England, the state of Oregon, etc) to keep costs down is deny coverage of expensive things like BMTs. You can't deny the person, but you can choose to offer insurance that doesn't cover anything catastrophic.

You can say you're spreading it out over so many people where it doesn't make a difference, but our catastrophic claims were in a risk pool of healthy-enough-to-work 35-60 y/o women (mostly). This govt risk pool will include many of those NOT healthy enough to work + those who are already sick and wouldn't otherwise be covered under insurance.

I'm guessing the extremely inclusive policies will be very expensive because those who are already sick will choose them. Those who don't think they're going to get sick anytime soon will choose the other stuff because it's cheaper.

Sorry, just not buying this whole unfunded mandate = cost savings business. Unfunded mandates didn't work for EMTALA. They'll "fund" this mandate by raising prices on everyone, same as emergency depts.

Sadly, it has been my experience that our host often makes statements like "more cost-efficient gov't programs", etc and when someone asks him to show an example or two, the question is never responded to. A while back he mentioned new and novel ways to raise money without taxes, and when I asked how........ I'm still waiting for an answer. I hate to say it, but the blog has lost its charm when it becomes another opiunion outlet with no attempt to honestly debate questions. Not to put a dig in because,of course, it is SF's blog and he can do whatever their heart desires. I guess I'm just a bit disappointed.

The other problem with the stuff on page 16, is that within the maximum five years phase-in (or less, depending on your employer's size), you will only be able to keep your plan if it meets gov't approval to be in the Exchange. If you like your plan but it doesn't meet some bean-counter's definition of "approved", you will NOT be able to keep it. Or if you do, you will have to pay 2.5% of your income per person on the plan to stay with it. I don't have another 10% of my pre-tax income to hand over to the feds. And of course they won't call it a tax, no sir, it's just administrative fees I'm paying for something I don't want and don't use. (I may be wrong about the exact percentage, but it's still not minimal.)

I find it interesting that two of the people in opposition seem to be medical professionals -- a nurse and a doctor.Don't you think it would be great if all of your patients could actually afford to pay for the services you provide them (via insurance)? It doesn't make sense that you want people to be able to choose their own plan when a significant portion are not insured and will not pay you for your work!It also doesn't make sense that you are opposed to a single large payor. The large number of health insurers in the country costs healthcare organizations billions of dollars a year -- caused not by the differences in coverage, but by the difference in billing requirements. Did they teach you that in med/nursing school?

J, what you don't realize is that the government has proven to be one of the poorer payers. Payment can take 6 months at times. Private insurance has a procedure called 'prior authorization' that everyone hates. The insurer says, 'No, you don't qualify for procedure X and we won't pay for it.' Medicare doesn't do that. I often read blog posts of seniors bragging that they've never had a procedure denied. What they don't know is that Medicare DOES deny coverage, they just do it on the back end -- leaving the hospital and the doctor in the lurch for the costs. This is why we fear government 'insurance'.

I'm all for the government taking a stab at providing 'insurance'. However, they have to do it fairly:1. No relative price fixing! Currently the government demands that they pay 17 to 20% less than anyone else does. This is just wrong and drives up health costs for everyone else. It's called 'cost shifting' and it's fraud. 2. The government must run a balanced account and it must be confirmed by an independent accounting firm. 3. Health care providers must be permitted to refuse to accept the patients from the government 'insurance'. No coercion!!

Anonymous, I won't claim to be an expert, but you are wrong on a couple of counts.

You say CMS is one of the poorer payors, but don't make any valid points to that effect. Other payors also take a long time and many do not pay electronically -- which is a great benefit to healthcare providers. Medicare also denies procedures they deem 'medically unnecessary'.

What are you talking about with 'relative price fixing'? The government does not demand that they pay "17-20% less". That is not true. Many payor contracts are based on Medicare's approved amount -- but private insurance companies pay more and less than Medicare, as they choose. 'Cost shifting' -- what?

I don't know what you mean by 'balanced account'. Private and public companies practice "accounting" as well.

On your last point, providers are free to not accept Medicare and Medicaid payments and patients (given the patients are stabil). Some places are referred to as 'boutiques' because the patients pay the doctor directly for care rather than using private or public insurance. Doctors can limit who they care for based on insurance if they choose -- most realize this significantly limits their patient base.

I'm sorry but you're just wrong about Medicare. They're our best payer in that, though their rates are lower than I'd like, the claims are electronic and paid within 2 weeks, typically. And we never ever get payment denied under medicare, whereas the privates arbitrarily deny claims all the time. (It's true that they sometimes won't pay the hospital for inpatient admits that should have been obs, but that's another topic.)

As for government insurance principles, you stipulate:1. No relative price fixing! ...2. The government must run a balanced account ...3. Health care providers must be permitted to refuse to accept...

Are you aware that you are basically describing public option in the Senate HELP bill? The House bill is pretty close to that as well, IIRC. So are you endorsing the public option, then?

Wait a sec, I forgot, when do the actuarial scientists get involved in the government run health insurance? I see a lot of speculation about what will what will not balance out but no actual evidence. On that note, I know for a fact that REAL insurance providers are constantly running numbers. You get deductions if you live healthily, you don't if you don't. It's that simple. The truth is, insurance isn't a super high margin business. So, if the government can provide it much cheaper that means one of two things, 1) either, they're cheating the system, or 2) their insurance is going to be worse. Either way, this is a bad idea.

So what does this mean in the real world, Shadowfax? Well, let me give you a real example: myself.

I'm self-employed and my wife has maternity coverage. I have an individual health care plan through Blue Cross Blue Shield. Fast forward to one year after the House bill has passed.

If our family decides to remove maternity coverage from her plan, we can't. Once we alter the plan, it's gone. Before the bill, we could've just dropped it and gotten a premium adjustment. Something simple prior to government interference just got a lot more complicated.

So I'd have to reapply for a new individual insurance policy. Remembering all the paperwork involved for applying for individual health insurance the last time around, this is likely to be a time-consuming exercise.

So after reviewing the NIE plans, what happens if I can't find an individual plan that suits my requirements? What if the plan that matched my previous policy is now much more expensive than before, or even worse, unavailable?

No worries, I'll just check out individual plans not available through the NIE. Oh wait ... there won't be any. Such plans would be illegal. My insurance options prior to government interference just got a lot more limited.

So now I'll be forced into an NIE plan that I may not fully want, is more expensive than before and/or which my lack the options vs. my previous plan. Of course, I might find a cheaper, better plan under NIE as well. My "real world" problem is that the government can't guarantee that I will. And it certainly won't let me go back to my old policy if I don't wind up liking the new one I sign up for.

Furthermore, ensuring NIE compliance and participation will result in an added cost private insurers will pass on to consumers in the form of higher premiums. What if private companies see NIE compliance and participation as too expensive or burdensome, and decide to abandon the individual policy market? Once again, my insurance options prior to government interference just got even more limited.

So Shadowfax, using your "real world" criteria, please tell me how a House bill that makes my life more complicated and that could limit my health care options is in my family's best interest?

Besides, as a doc you should be championing real health care cost-cutting via tort reform to curb frivolous and money-grabbing malpractice suits, which would lower the cost of your malpractice insurance -- savings that would result in lower health care costs for everyone.

You liberals are missing the point. The legislation clearly states that your current policy must not change for any reason. It does not contain any paremeters. So if your plan now offers better benefits or at a cheaper rate, then you cannot continue in that plan. It does not clearly state whether that individual must enter the public plan or if they can choose from the exchange. In essence it will not make a difference, becuase all of the plans on the exchange will provide the same coverage. Their private plans will struggle to provide the same coverage for the same or lower rate, not because the public plan will be more efficient, but because they will be publicly funded and can operate at a loss, such as the post office, Amtrak, Medicaid, Medicare, etc... So a taxpaying individual will pay for the public option, through higer taxes in cigarettes (which has already passed), higer taxes on gasoline, taxes on soda, taxes on privately provided benefits, or any other taxes that they can come up with. That is not a "choice" for the average american who will struggle to pay the higher taxes and at the same time will pay for a private plan. Of course that individual will elect the government plan becuase he/she wil pay for it whether they enroll or not.

I can continue to explain it for you, but I can't understand it for you.

Private insurance will be more available under the NIE. It will be guaranteed (the insurance companies can't refuse to issue a policy if you sound sick).It will be more affordable (insurers can't jack up your rates because you have a medical history).It will be durable (insurers can't cancel your policy if they feel like it).

All this talk about the insurance industry going out of business is silly apocalyptic talk. Assertions that access to private insurance will decrease is deliberate misinformation.

Just doesn't make sense that for profit insurance companies will be able to compete with a non profit public option. Some might be able to cut costs to stay in the game, but I think most will fold over time. Just basic ecomomics. That will mean fewer choices over time.

1) Everybody always says that the private market is more efficient, and that government is bloated and inefficient. If this is the case, the private insurers should compete just fine against the public plan.

2) if the public plan proves to be cheaper and as a result wins out -- then we save a lot of money. Which, given that health care is 17% of the US economy, would be a good thing.

I rather suspect that neither will be the case -- like FedEx and the Post Office, they'll probably co-exist with sorta complementary fucntions

It's just amazing to me how hard-headed people are in their opposition to this, even to the point of irrationally contradicting themselves, and making things up and calling them facts. Anon says:"The legislation clearly states that your current policy must not change for any reason.... So if your plan now offers better benefits or at a cheaper rate, then you cannot continue in that plan. It does not clearly state whether that individual must enter the public plan or if they can choose from the exchange. In essence it will not make a difference, becuase all of the plans on the exchange will provide the same coverage." If your current plan changes, that would violate the premise, wouldn't it? So it can't change, so you CAN continue in it. Isn't that correct (given the facts you offer)? And the bill DOES clearly state that an individual can choose NIE private plans or the public. And there is nothing that says plans will all provide the same coverage, only A MINIMUM STANDARD of benefits, to protect people from getting HOSED! If you would just read the damn bill instead of somebody's interpretation of it, you could arm yourself with facts instead of fiction.

"I'm for government-insurance because I think the government can do it better & cheaper."

Yeah, sure, the government does everything better and cheaper. Like the $4,000 toilet contracts, the $50 bolt contracts, and let's certainly not forget that exemplary organization of process efficiency effectiveness, the US Postal Service that loses $7B a year. Yep, I have the utmost confidence that the government will be able to provide insurance better and cheaper.

Shadowfax

About me: I am an ER physician and administrator living in the Pacific Northwest. I live with my wife and four kids. Various other interests include Shorin-ryu karate, general aviation, Irish music, Apple computers, and progressive politics. My kids do their best to ensure that I have little time to pursue these hobbies.

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